Imagine on the
eve of trial, after years of litigation, countless hours of work and tens of
thousands of dollars in expenses, you’ve finally settled your case at
mediation. The Defendants have agreed to pay a sum that your client
begrudgingly accepts because – well, its money and it’s just enough. It is
agreed that the Defendants will pay within 30 days and, upon payment, the
lawsuit will be dismissed. Because the trial is imminent, the settlement is
communicated to the trial court. In all communications with the court it is
clear that no dismissal has been authorized, agreed to, or requested.

The Defendants
fail to pay the compromised settlement amount within 30 days thereby breaching
the settlement agreement. You elect to move forward with the trial rather than
moving to enforce the settlement agreement on the compromised amount. The only
problem is that you learn the clerk of court inexplicably signed a Form 4
dismissal – not only removing your case from the docket but also dismissing it
with prejudice. You petition to the trial court to vacate the dismissal because
it was not authorized by the parties, or signed by a judge. Problem – the trial
court denies your motion to set aside the errant judgment and says that your
only remedy is to enforce the settlement.

This occurred
with one of our cases. We took the matter up with the Court of Appeals who
reversed the trial courts ruling and found that the clerk of court’s dismissal
was void and that it should have been set aside. The Defendants then asked the
Supreme Court to consider the matter and, recently, the Supreme Court affirmed
the Court of Appeals holding that such a judgment is void. The following summary provides more detail
and the complete Court of Appeals and Supreme Court Opinions are available here.

The underlying
action included claims of breach of contract, constructive fraud, conversion,
and tortious interference with contractual relationship. The parties reached a
settlement agreement at mediation for a confidential sum to be paid within 30
days of the agreement. Prior to payment, the parties contacted the Dorchester County
Clerk of Court to inform them that a settlement was reached. It is clear that
no dismissal has been authorized, agreed to, or requested. Rather the parties
indicated that they would submit a stipulation of dismissal when the settlement
had been consummated and that the case was not to be dismissed until then.

Despite these communications, the
Clerk of Court removed the case from the trial docket and dismissed the matter.
The firm attempted to get the matter restored to the trial docket when payment
was not made in 30 days. After contacting the court, the firm was informed for
the first time that the case had been dismissed. We filed a Rule 60 Motion which
the trial court denied without offering any reasoning. We filed a Motion to
Reconsider which was likewise denied without any written reasoning or opinion.
The trial court’s dismissal left us with the options of enforcing the
settlement or appealing the ruling. We chose to appeal.

On appeal, the
South Carolina Court of Appeals overruled the trial court decision and found
that although they typically review denials of Rule 60, SCRCP, motions for
abuse of discretion, a court has no discretion to perpetuate a void judgment.
The Form 4 was vacated, and the order of the trial court denying our client
relief from the void judgment was reversed and remanded. Rule 79(f) in SCRCP
state that “no action listed in the file book shall be stricken unless and
until (a) plaintiff shall file and serve a notice of stipulation of dismissal;
or (2) counsel have prepared and filed an order bearing on the written consent
of all interested parties; or (3) dismissal is ordered by the court. The court
ruled the County Clerk of Court does not possess the authority to unilaterally
dismiss the case because the clerk is performing only a ministerial function
and not a judicial function. The County Clerk of Court may only sign and enter
a judgment without court discretion and approval when the judgment merely
confirms a jury’s general verdict, or upon the court decision that a party
shall recover only a sum certain or costs or that all relief shall be denied. A
clerk exceeds authority granted by the rule when s/he purports to enter a
judgment in a case s/he have no authority to do so. Exceeding this authority
makes the judgment entered void. The Court of Appeals reversed the lower court
decision and remanded the manner back to the trial court.

The Defendants
then filed a petition for certiorari to the South Carolina Supreme Court.
Deciding the matter per curiam, The South Carolina Supreme Court affirmed the
decision of the Court of Appeals. The Supreme Court agreed that the Form 4
order of dismissal signed by the County Clerk of Court was void and the trial
court erred by not restoring the case to the roster when payment was not received.
Further, the court said the Court of Appeals correctly vacated the order and remanded
the case for trial. The Supreme Court noted,

Trial courts frequently enter Form
4 dismissals to maintain an accurate and current docket. When a party notifies
the court a case has settled, a Rule 41(a)(2) order of dismissal may be entered
to take the case off the docket while the parties consummate the settlement. In
our Federal Courts, this is referred to as a “Rubin” order. If the settlement falls through, the court may either
restore the case to the docket, or if asked, consider whether to enforce the
settlement.

The
Supreme Court agreed the Form 4 dismissal signed by the clerk of court was
void, circuit court erred by not restoring the case to the roaster, and the
court of appeals correctly vacated the order.